Canceled Angel Stadium deal prompts effort to strengthen surplus land law

Fans line up to enter Angel Stadium in 2021.
Fans line up to enter Angel Stadium in 2021.
(Gina Ferazzi / Los Angeles Times)

After Anaheim City Council terminated the sale of Angel Stadium amid an ongoing FBI investigation, state Sen. Tom Umberg is looking to strengthen the Surplus Land Act.

An early critic of the deal, the Democratic legislator authored Senate Bill 361 to prevent similar controversies from arising when a sale of public land is found in violation of state law but cannot be voided otherwise.

The bill seeks to beef up the California Department of Housing and Community Development’s enforcement hand by granting the agency the power to block such transactions as opposed to just levying fines.

“Rebidding the project would be the penalty,” Umberg said. “That seems to be the best remedy.”

The state housing agency had deemed the $320-million sale of Angel Stadium and 150 acres of parking lots surrounding it to Los Angeles Angels team owner Arte Moreno illegal. In a notice of violation issued last year, it claimed that Anaheim failed to classify the land as “surplus” and open it up for bidding, with affordable housing prioritized under the law.

Anaheim officials insisted the deal didn’t violate the Surplus Land Act but faced a $96-million fine if it didn’t add significant housing, including affordable housing, on site in a revised deal or declare the land surplus and open the stadium site to bidders.

“Obviously, it wasn’t a deterrent,” Umberg said.

State Atty. Gen. Rob Bonta negotiated a stipulated judgment with the city that would have turned the potential fine into an affordable housing trust fund of the same sum. Moreno planned to convert $96 million in community benefits credits from the city under the deal into such a payment; in exchange he would be relieved of 80% of his prior obligations to build affordable housing near the ballpark.

The terms prompted questions as to the sturdiness of the Surplus Act Law and its intended aims.

Orange County officials aren’t sufficiently notifying residents about the potential sale of public lands to private individuals, according to a recent Grand Jury report.

Assemblyman Phil Ting (D-San Francisco) authored amendments to the law in 2014 and 2019 to tighten it. Umberg consulted with him on his own proposed amendment.

“When the Surplus Lands Act was passed, it was because the state recognized the need for more affordable housing,” Ting said in a press statement. “It’s clear that legislation is needed so that we aren’t seeing more local governments benefiting from violating the law.”

The Angel Stadium deal was all but done after a council majority approved the stipulated judgment in April during an abruptly called special meeting. It headed to Orange County Superior Court for final approval.

But the attorney general sought a stay of the sale in court, which was later granted, after being informed of an FBI investigation into former Anaheim Mayor Harry Sidhu, who is alleged, among other things, to have sought a million dollars in independent expenditures from the Angels for his reelection in exchange for finalizing the deal.

Following Sidhu’s resignation, Anaheim City Council terminated the sale he led negotiations on.

In the wake of the scandal, Umberg’s proposed amendment would only be applicable to public land in Orange County following a committee request and has a sunset provision for 2030.

If a future violation is found under it, the state housing agency could send a project back to a bidding process. There is also a provision inspired by Anaheim’s abrupt special meeting to approve the stipulated judgment. If passed into law, SB 361 would require a government agency to give two-weeks notice before a sale of surplus land is publicly discussed.

“Fourteen days seemed to be sufficient time to allow the public and government officials to be able to understand the deal and make an informed decision about its benefits, or lack thereof,” Umberg said.

The proposed legislation also comes on the heels of an O.C. Grand Jury report that criticized the county for insufficiently notifying residents about potential sales of public land.

Umberg also introduced Senate Bill 34 earlier this week, which would make certain contracts void if bribery of a public official is involved. The law is straightforward.

“If you have a government official who is not acting in the best interests of the taxpayers,” he said, “then the deal is void.”

Support our coverage by becoming a digital subscriber.